Angry Birds has morphed from an addictive iPhone game into a cultural phenomenon complete with merchandising and video tentacles, and game maker Rovio has the numbers to prove it.

Rovio's revenue and profit numbers are so good that at least one analyst firm is expecting the Finnish company to go public in 2014 at a valuation north of $4 billion. Others, though, think the company could be in for a difficult next level.

The company, which launched Angry Birds as a mobile game in 2009, more than doubled its revenue in 2012, to $194.8 million from $96.8 million in 2011. As importantly, Rovio nearly tripled its revenue from consumer products and licensing, to $87.7 million from $29.2 million, showing it's no longer just a gaming firm, but a multimedia force to be reckoned with, according to private company analyst PrivCo.

"Rovio's smart evolution from a one-brand online game maker into a multimedia entertainment studio with a library of characters has paid off handsomely, as triple digit growth in high-margin Consumer Products licensing gives VC backers nothing to be angry about," said PrivCo CEO Sam Hamadeh.

His firm expects the growth to continue, and for Rovio's revenues to reach $364.8 million this year, setting Rovio up for a 2014 IPO with a valuation of $4.2 billion.

Others, though, aren't so sure, and the company itself is striking a cautious tone.

Rovio chief financial officer Herkko Soininen tells the Wall Street Journal's Juhana Rossi in an email that continuing to wow the mobile gaming set is still crucial to the company's growth.

"The rate of growth and profitability are dependent on the success of new games launches, our ability to maintain and strengthen the relationship we have with our fans and the speed and success of our new initiatives," he said in an e-mail.

Some analysts are equally cautious. Tero Kuittinen, an analyst with Alekstra Inc., is one of them. He tells the Journal that Rovio's multimedia strategy may backfire, leading to slower revenue growth than for a pure gaming company. And he's actually cut his estimate of Rovio's value. Here's Rossi's explanation:

Mr. Kuittinen expressed concern that revenue growth may slow and profit margins may be slimmer than they would be for a pure gaming company, and that may severely dent the valuation in an IPO.

The analyst last year valued Rovio at $9 billion, but now says that if the company did an IPO next week, its valuation would be a maximum $2 billion, based on the most recent numbers. He expects Rovio to go public in more than a year.

And as Rovio ages, it will face the kind of question every other gaming company does: Where are the new hits when gamers burn out on the original offering? If it can't answer that question successfully, no amount of merchandising or video can sustain Rovio's torrid growth.

Since coming aboard with Upstart’s parent company, Kent has covered sustainability and business, entrepreneurs, technology, and venture capital. Now, he covers all the ways upstart businesses get their money.

SHARE THIS STORY

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.